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Don't Make These 7 Mistakes When Choosing Your Health Insurance Plan - YouTube
Channel: Smart Family Money
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I'm getting ready to sign my family up for a聽
health insurance plan for 2022 and it'll be the聽聽
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ninth time we've gone through this process in only聽
four years and in that time we've been on pretty聽聽
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much every type of plan imaginable: a PPO, an HMO,聽
a high-deductible plan, a low-deductible plan.聽聽
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We've been on employer plans, marketplace plans,聽
and even a Medicaid plan. I've learned a lot about聽聽
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analyzing health plans strategically and I'm going聽
to share with you the mistakes that people make聽聽
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too often with choosing a health insurance plan.聽
The first up is ignoring those high deductible plans聽聽
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with HSAs. A lot of people just pass right by those聽
plans because they're afraid of what might happen聽聽
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if they have a big medical expense. They see聽
that the deductible's over ten thousand dollars聽聽
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and they're thinking: I cannot possibly afford聽
that. But if you're a family that has low medical聽聽
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expenses, choosing that high deductible plan could聽
save you thousands of dollars on monthly premiums聽聽
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and if you do have to pay the cost of a few聽
medical things through the year, it's likely those聽聽
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things are only going to cost you a few hundred聽
dollars, so you're still going to be ahead by a聽聽
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lot. Also keep in mind that when you're paying聽
100% of the cost before you hit the deductible,聽聽
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you're paying the full insurance rate for that,聽
not the full cash rate, so it might not be as bad聽聽
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as you think. The other group of people that could聽
really benefit from these high deductible plans,聽聽
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surprisingly, can sometimes be people with聽
very high medical expenses. The reason is that聽聽
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usually with these plans, once you meet that high聽
deductible, everything 100% is completely covered聽聽
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after that point. You're not going to have any聽
more co-pays co-insurance. The other thing to聽聽
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pay attention to is whether an employer offers聽
you some free money in your HSA. If they give聽聽
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you that money and you don't use it, it's yours聽
to keep forever. Remember that HSAs are not like聽聽
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FSAs and that the money does not go away at the聽
end of the year. If you want me to make another聽聽
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video about HSAs and FSAs, let me know down in the聽
comments. I'd be happy to make one. But I want to聽聽
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get back to health plans. The next mistake that聽
a lot of people make is looking at the monthly聽聽
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cost of the health plan instead of looking at the聽
overall yearly cost. This sometimes can bring to聽聽
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light things you didn't notice when you're just聽
looking at the monthly cost. For example on our聽聽
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current plan options, I added up the premiums聽
for the whole year on the low deductible plan聽聽
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versus the medium deductible plan and I realized聽
that the low deductible plan was so expensive聽聽
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that it never made sense to choose that regardless聽
of what kind of medical expenses you would have.聽聽
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I'm not saying yours is going to have something聽
like this but just add up the yearly cost and聽聽
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see what difference it's going to make in the long聽
run. It might show you something different about聽聽
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the plans. The next mistake is not considering聽
your own personal psychology related to choosing聽聽
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a health plan. My friend was telling me about聽
they choose a low deductible plan with inexpensive聽聽
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co-pays partly because her husband is one of聽
those people that really hates going to the doctor聽聽
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and he's also a pretty frugal guy, so if he hears聽
that going to a doctor is going to cost him $150聽聽
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out of their HSA account he's not going to go, but聽
if it's only going to cost him a $20 copay to go聽聽
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to the doctor, he's going to be more willing.聽
Since she cares about her husband's health,聽聽
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she'd rather just choose the more expensive plan聽
and know that he's going to go to the doctor when聽聽
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he needs to. The next mistake is not understanding聽
the difference between a co-pay and co-insurance.聽聽
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A co-pay is a flat rate that you pay for a聽
doctor's visit or medical service. For example聽聽
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you might have a $20 copay to visit your primary聽
care doctor. A co-insurance is a percentage that聽聽
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you pay so you might have a 20% coinsurance for聽
a doctor's visit. At first glance, it might seem聽聽
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like co-pays are a better deal than a co-insurance聽
but that's not always true. Again, you're talking聽聽
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about a percentage of that insurance rate,聽
which is lower than you think a lot of times.聽聽
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For example, one plan I had had a $60 copay for聽
visiting specialist doctors but that included聽聽
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quick follow-up visits with my son's ENT and the聽
receptionist told me that my copay was actually聽聽
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almost the full price of the visit because a quick聽
follow-up visit only cost about sixty dollars,聽聽
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so if I'd had a twenty percent copay, it聽
would have only cost twelve dollars instead聽聽
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of my sixty dollar copay, so just think about聽
which one is going to be a better deal for you.聽聽
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The next mistake is not reading the fine print on聽
your plan options. Many health plans don't cover聽聽
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some things that you might think they do. Some聽
examples of this are treatment for infertility,聽聽
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speech therapy except in certain situations,聽
and hearing aids. There are also often limits聽聽
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on how many visits you can have to things like聽
a chiropractor or physical therapy. Next mistake聽聽
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is not checking if your doctors are on your plan.聽
Some plans may have a price for in-network doctors聽聽
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and out-of-network doctors but you'll often pay聽
a lot more if you go to an out-of-network doctor.聽聽
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These are usually called PPO plans which stands聽
for preferred provider organization but there聽聽
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are certain plans that do not offer any coverage聽
outside of their network. These are usually HMO聽聽
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plans or health maintenance organization plans.聽
The HMO plans tend to be less expensive per month聽聽
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but you are limited to ONLY the doctors inside聽
your plan. The only time you're going to be able聽聽
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to get care outside of that network is if you're聽
outside of your geographical area or you need聽聽
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emergency care. Next mistake is not accepting that聽
choosing a health plan... it is a gamble. You really聽聽
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are trying to predict what your health expenses聽
are going to be for the next year and trying to聽聽
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choose which one is going to be least expensive聽
for you, based on your own unique situation. You聽聽
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never know what's going to come the next year聽
and sometimes the one you think is going to be聽聽
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the least expensive doesn't work out the way you聽
thought. Just don't beat yourself up if later you聽聽
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realize a different plan would have been a better聽
deal. I've certainly been there before. I hope you聽聽
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liked this video. Next up, check out this other聽
great video that I know you're going to love.
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